WASHINGTON — Congressional negotiators clinched a deal on Tuesday for a five-year, roughly $ 300 billion transportation bill that would inject badly needed investments into the nation’s deteriorated highways and other infrastructure and also reopen the Export-Import Bank.
The legislation, which relies on short-term financing to cover a continuing shortfall in the Highway Trust Fund, will be voted on later this week by the House and Senate.
Architects of the transportation bill, including Republicans and Democrats in each chamber, hailed it as a major achievement in an era that seems to be defined by small-bore governing. Since 1987, Congress has generally failed to pass long-term transportation bills, relying on short-term measures, which experts say make it difficult for states and local governments to plan crucial projects.
The chief negotiators were Representative Bill Shuster, Republican of Pennsylvania, who leads the House Transportation and Infrastructure Committee; Representative Peter A. DeFazio of Oregon, the panel’s senior Democrat; Senator James M. Inhofe, Republican of Oklahoma, who leads the Senate Environment and Public Works Committee; and Senator Barbara Boxer of California, the committee’s senior Democrat.
In a joint statement, the lawmakers said the agreement would provide “long-term certainty for states and local governments” as well as “improvements to the programs that sustain our roads bridges and passenger rail system.” The bill is called the FAST Act, for “Fixing America’s Surface Transportation,” and senior congressional leaders said they expected it to win broad, bipartisan support.
Despite the bipartisan enthusiasm, the bill still fails to address a chronic shortfall in financing for the Federal Highway Trust Fund, which is supposed to pay for most transportation infrastructure projects, and has been the subject of a long-running disagreement over tax policy.
The Highway Trust Fund is financed largely by a federal gas tax, which was last increased in 1993 and is not indexed to inflation. That, together with greater fuel efficiency of cars, has led to shortfalls of more than $ 70 billion since 2008, which Congress has covered with general funds.
Instead of raising the 18.4 cents per gallon gas tax, the bill relies on a variety of short-term financing provisions, including a requirement that the federal government use private collection agencies to recoup certain outstanding taxes, a provision that would allow the government to deny new passports to individuals owing more than $ 50,000 in back taxes, and the sale of 66 million barrels of oil from the Strategic Petroleum Reserve.
The sale of oil is projected to generate $ 6.2 billion over 10 years, effectively pricing the oil at more than double the current price per barrel.
Some of the money will come from the Federal Reserve. The bill cuts the Fed’s annual dividend payments to large commercial banks, redirecting that money to highway construction. It also drains money from the Fed’s rainy-day fund.
The banking industry opposed the dividend cut, but won only a partial victory. The Senate voted to replace the current 6 percent dividend with a 1.5 percent dividend. The final version instead ties the dividend to the interest rate on 10-year Treasury bonds, currently 2.2 percent, up to a maximum of 6 percent.
The bill also requires the Fed to fork over $ 19 billion from a rainy-day fund that has ballooned to $ 29 billion in recent years. The size of the rainy-day fund also would be limited to $ 10 billion.
A Fed spokesman declined to comment, but Fed officials have previously criticized both the dividend cut and the draining of the rainy-day fund, arguing Congress should not use Fed funds to bankroll specific programs.
Among the many items in the bill is a provision that stands to increase compensation for victims of rail accidents, which grew out of a train crash in Philadelphia in May. The measure also contains good news for states. Every state would receive a 5 percent increase in federal highway funding in the first year. Local transit systems would receive an 8 percent increase.
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